How does a small payments app company from Toronto make a name for itself? How about driving 8% of in-store sales on day 1 of using the service? Or, how about contributing to an over 20% increase in sales during that day as well? Or even increasing basket size by 17%? Compelling reasons, but those are just the start. In order to succeed here where others have failed sometimes a philosophy adjustment is in order.

For Wendy MacKinnon Keith that philosophy started with understanding the root problem she was going to address with her company Digital Retail Apps. It wasn’t about payments, it wasn’t about pushy messages inside the store, it wasn’t even about helping salespeople sell more. Her focus was squarely on helping customers avoid waiting in long lines to pay for their merchandise. That’s it. No. More. Lines.

This simple mantra is a result of focusing on the important aspect of retail – the customer experience. Marry that with the concept that having more people stand in more lines means fewer shopper turns which leads to fewer transactions and, well, fewer dollars in the retailers pocket and you have a problem in need of a quick fix.

How did she do it? What were the early results? What can other retailers learn from her experience? All this and more is jammed into this episode.

Enjoy!

How does a small payments app company from Toronto make a name for itself? How about driving 8% of in-store sales on day 1 of using the service? Or, how about contributing to an over 20% increase in sales during that day as well? Or even increasing basket size by 17%? Compelling reasons, but those are just the start. In order to succeed here where others have failed sometimes a philosophy adjustment is in order.

For Wendy MacKinnon Keith that philosophy started with understanding the root problem she was going to address with her company Digital Retail Apps. It wasn’t about payments, it wasn’t about pushy messages inside the store, it wasn’t even about helping salespeople sell more. Her focus was squarely on helping customers avoid waiting in long lines to pay for their merchandise. That’s it. No. More. Lines.

This simple mantra is a result of focusing on the important aspect of retail – the customer experience. Marry that with the concept that having more people stand in more lines means fewer shopper turns which leads to fewer transactions and, well, fewer dollars in the retailers pocket and you have a problem in need of a quick fix.

How did she do it? What were the early results? What can other retailers learn from her experience? All this and more is jammed into this episode.

Full show notes can be found here:

Key takeaways from this episode. Click on the link and the video will take you to that clip

Rob: Hello, everyone and welcome to Untether.tv. This is your single source for deciphering the mobile experience. I’m your host and founder, Rob Woodbridge. Today’s episode is all about retail. Better yet, it’s all about the thing I hate the most about retail, which is lining up and paying at a cash register.
We’re talking to Wendy MacKinnon-Keith, who is the founder of a newly launched payment app called SelfPay. She’s based here in Toronto, Canada. That’s Canada. The focus of what we’re going to be talking about of course is about her business, about why she did it, the opportunities that she sees, how’s she’s going to protect herself, but she also did this great thing at another Canadian company, an Edmonton based company called LUX Beauty to actually launch and roll out this product with in-aisle purchasing.
We’re going to talk extensively about the results of that and the lessons that she’s learned there. Without further ado, my fellow- Canadian. Hello Wendy. Welcome to Untether.tv.

Wendy: Hey. Hey, Rob. How are you?

Rob: I am awesome. Thank you for doing this. I love showcasing Canadian companies.

Wendy: Happy to be here.

Rob: Well doing amazing technology in the retail space. To those of you who actually subscribe to my other podcast is the Mobil Ecommerce with Chuck Martin, and I don’t understand why you wouldn’t. Chuck also covered Wendy a couple of weeks ago, a number of weeks ago, but now probably if you’re listening to this, around this LUX Beauty roll out and he was actually surprised, I think, that there was this much innovation in Canada. I said, “Chuck you’ve got to come up and see. We are an innovative nation.”

Wendy: We are.

Rob: All right. Tell us what does SelfPay do.

Wendy: In a nutshell, SelfPay is a way for shoppers to seamlessly shop and pay in one flow all on their mobile device in their favorite retail store. That’s really it. To make it work for merchants, we have a companion merchant app called Verify so that after you’ve shopped and paid in the aisle, you show your digital receipt as you leave the store or the aisle or the fitting room, and the merchant just quickly scans your digital receipt, shows the same transaction details on their screen, and you are good to go.

Rob: Walk us through. I walk into a store, and I’m interested in a product. I buy a pair of jeans or whatever, and I’m in the changing room, and I’m trying it on and I say, “I’m going to buy these.” What does a consumer do?

Wendy: You just would pick up the barcode, the tag, the price tag on the jeans, you would… You’d have your SelfPay app open. You would scan the barcode and that’s going to show you the price and the details and all the information. You’ll select Ready to Buy and you’d just add it to your cart and then you’ve added it to your digital cart, and then you can choose how you want to pay.
Today we work with the multiple… different payment methods. You could choose your Visa, Mastercard, Discover, American Express. Just recently we’ve added an integration with PayPal. If you prefer to do that, that’s also available. Just say check out, and you’ll get a digital receipt within literally one or two seconds. That receipt, you just show it to a member of the staff as you’re leaving the store.

Rob: Amazing. And it’s that simple?

Wendy: It is that simple. That’s really the beauty.

Rob: No human intervention, right? That’s what I love about it.

Wendy: That’s what’s really different about it because we were… The whole beginning part of this process, we thought about the shopper experience. You know there’s… This is a really… Retail, digital, payments, it’s a very complicated ecosystem.

Rob: Yes, it is.

Wendy: There are so many different players and so many different functions so we wanted to think about it… Rather than think about it from any one individual function, we wanted to think about the experience the shopper has and how to make that as smooth and actually friction-free as possible to let them actually go about shopping and forget about… You have to pay, but make that as simple and friction-free as possible.

Rob: It’s funny because most places where you go, the retailers, any retailers, whether it’s a clothing store or a beauty store or a grocery store, they are all constructed with the store in mind, not the consumer. The flow, the way that you start, and that the human turns to the right when they walk into a grocery store. The impulse buys at the cash register, and what you seem to be doing here is turning it entirely on its head.

Wendy: Exactly. There’s some historical reasons for that. If you go way back to the original kind of the independent shopkeeper there’s one person… In the very beginning, the items would probably be behind that person. Certainly today that still continues with the distinction between shopping activities and paying activities.

Rob: Right.

Wendy: But, I’m actually we’re… It’s when we go shopping; we want the thing the item, the nail polish, the jeans, the jacket, the Fruit Loops. Whatever that thing is, that’s what we’re there for and maybe discover new things, new items, but. Why have this, why have this false separation? We don’t have it in an ecommerce transaction. I mean, wouldn’t that be funny if you went to a website, you go sign on and you buy your items then you’d have to stop that, close that, and open up some new page and then you’re going go through… That doesn’t make any sense at all.

Rob: You know, it doesn’t. It doesn’t, but, that’s the way that it’s been and it seems like we’ve accepted this kind of this split between shopping and paying. The other side of it is that I don’t go to the grocery store to pay, right? I think that what we’re seeing a lot of in the mobile space right now is this focus on payments.

Wendy: I know.

Rob: Not a focus on the experience or the focus on shopping, but it’s more like, “Hey use my payment tool. Use my payment tool,” and in the most inconvenient way possible. Like I said, I don’t go to Amazon.com to pay. I go to shop.

Wendy: You are so right. I mean we’re not called payers.
We’re called shoppers. I mean it’s really… Again it’s so simple. We’re shoppers and we’re there to shop. We’re not there to pay. Obviously we have to pay. And it’s so, it is so interesting, but again I think a lot of it is just historical. You have all of these companies set up that are merchants. Then there’s the whole payment ecosystem and even some of the leaders in mobile payments who are you know huge multinational global companies who are spending every waking minute thinking about how to get you to pay with your mobile phone.
You know, my supposition is they kind of forgot that you’re actually there to shop. So, we need to bundle the paying into it, not separate it. Even in Canada where we have actually quite a few new mobile payment methods. Very cool, love the effort. It just keeps the recognition, the knowledge, and the awareness. But, if you think about it, even with all the new payment apps, what do you need to do? You go to the store, you get your item, or you order your drink, or whatever it is, you still have to stand in line. You still have to wait to pay and then you can tap your phone on the register. Well that’s fantastic. Who did you save time for? You or the person behind you?

Rob: Right, they didn’t have to swipe anything. They didn’t have to wait for your PIN. You’re right.

Wendy: Yeah, so it’s sort of the… In my, in our view it’s kind of the wrong focus.

Rob: You know, I love that because… Putting the user in front you know you, very quickly realize that who the payment tech is for and it’s not for the end consumer. It just isn’t for the user. And I think that payment happens as a result of the 900 other things that you’ve done right to that point and then payment is the after effect of doing everything else right. I got the jeans that I want. I’ve tried them on. The payment happens because I found the product that I want, not the other way around.

Wendy: Exactly. Even if you think that if you’re a merchant why would you want to introduce time, space, waiting, and some other process in between your decision that you want those jeans? Those are the best jeans. You don’t want any time in between…

Rob: Humans shouldn’t think.

Wendy: …or activity or space… Just, no, I’m done. I want to be on my way. We’re all so busy.

Rob: That’s so true. Yeah, you don’t want the humans to think. You just don’t. You just want them to pay. All right, that’s-, that’s it. Yeah

Wendy: Well, I mean putting it a little, a little uh, differently; I would say you want them to have that fantastic experience of those jeans.

Rob: Right, Exactly, Exactly.

Wendy: That’s where you’re going to get delighted, not the payment part.

Rob: No and I think that that’s you know, at that moment. And I use this as a great example is that um my father was very young and my father was going out to by his first ever brand new car. My whole life we’ve had use cars and we went to the Acura dealership, right? So, we took this test drive in this what I thought, maybe I was fourteen, it was the most amazing sports car. Beautiful, it went fast, it was low, it had cool lights and my dad said, “Yeah this is the one.”
So, he walked in, you know, they sat down at the desk and my dad forgot his checkbook in his car. So, all he had to do was leave the desk and get up and go and get the checkbook in his car and come back and then put the check, because that’s when people paid by check.
So, he was at that moment where he had the best experience and he was willing to put down money and in, I don’t know, in that, in like four minutes it took from him to go to the car, pick up his checkbook and come back, he changed his mind. He said, “Come on Rob we’re going.” I’m like what, what, what, what?

Wendy: Wow.

Rob: So, you know, that’s the convenience of pay. That’s what I’m… When I say you don’t want humans to think, like that’s what I mean. When they’ve made up their mind, they’ve had the great experience, it’s time to pay.

Wendy: Exactly.

Rob: So are these the reasons why you started this company, like you noticed that there was a gap in this marketplace?

Wendy: Well, my background is a management consultant and so I worked for a number of different, large technology companies. I was advising them on market channels, growth strategies and so on. And I realized that a couple of times before I’d seen some really significant discontinuities in the market so that while rather than advising like the third time around . . . Wait a second. I can see this.
I love to shop. I hate to wait. I’m just going to solve this problem for myself. I’m just going to make my own big company that I don’t need to be advising anymore. I’m just going to start creating and it’s been a great journey.

Rob: So literally you stop doing consulting. You’re in this full time. How is that transition?

Wendy: Very sharp. I don’t know how else to explain it.

Rob: It’s a good way to describe it.

Wendy: Yeah, it’s significant, but I have to say as much as I loved my consulting career and I did it all in different parts of the world, a lot of it was in the US. I spent 20 years in the US. And for very large companies, it was very exciting. But when you start to do something for yourself where you see like a real pain and a real issue in the market that you could have seen how it can be solved and then you start working on it. It’s not work. It’s just, it’s what I do. I’m absolutely committed to making this a better way to shop and pay and it’s been exciting.

Rob: When did you start? When did you have this idea that this was going to be something that was going to be so important to retail?

Wendy: Well, it has been some time so it actually started with some early ideas in very late 2011. And again, being a good consultant I could not stop myself from doing some primary research and some background. And so one of the first things I did is I took a trip to Boston because at that time in the US there was more of these kind of mobile shopping apps, mobile payment apps, and so on.
And in fact, Apple was one of the first places I visited in Boston and they still have it today. The Easy Pay app was part of the Apple store app. You can go in and pick an accessory off the shelf, you can pay on your phone, charge it to your iTunes account and walk out the door. You do not have to speak to any of the Apple associates in the store and I thought, oh, this is fantastic.
But this is not going to work for, I didn’t think, for most other merchants because A, it only worked for Apple, so obviously that’s one issue. B, you could only charge it to your iTunes account which of course that may still come down the road, but at the moment you can’t do that in other retail stores. You could only do one item at a time and there was no way to verify that that transaction was a successful transaction, so there’s a lot of trust.
Also in an Apple store it’s quite different as you, I’m sure you know the ratio of employees to the floor space is really high and that’s just not sustainable for any other merchant. They don’t have those kinds of margins to be able to justify that. So that’s literally when I thought of the idea, we need to have a way to have all merchants, all payment methods, multiple items, and a way for that merchant to verify that the transaction was successfully done on the consumers device.

Rob: So that’s the inspiration that led you down the path.

Wendy: That was. Yes, yes, that’s right.

Rob: But speaking about those guys, Apple, iTunes could become one of the world’s largest closed system, closed commerce system like PayPal is.

Wendy: Right.

Rob: But they’re kind of emerging in the beacon market with iBeacon and PayPal’s doing the same thing with their beacon technology, and all of these guys are starting to get into this space and looking very, very, very clearly in the space. How do you, a small company from Toronto, Canada, how do you compete in this world? How do you protect yourself?

Wendy: Well, a couple of points on that. So first off, the first one I want to say is interestingly are our whole model besides starting with the consumer and understanding the shopper path, it’s also creating a system that’s very open. So we’re already working with PayPal to enable . . .

Rob: Right.

Wendy: You can pay with PayPal, what’s in the phone, and we actually are talking with some of the other mobile payment companies as well so that we’re agnostic. So down the road if you want to pay with Google Wallet, or with Isis, or with RBC, or any other mobile payment method out there, our idea is that we want to make that possible so you can choose. And actually the consumer should choose which payment method they want.
Obviously that has to be also the same method that the retailers are offerings and so on, but we’re totally open. We want to have an open platform in that way. So we’re just distribution for all those mobile payment methods.
And then you asked also about how you protect this kind of technology. Well, in those early days when I had that sort of a- ha, like the light bulb went off and we need to have this way to verify these transactions in the aisle. I realized that it was actually pretty kind of low tech. I am not an engineer. I’m a business person. I’m like a consultant in my background. And I thought this is actually kind of a low tech solution, but it’s elegant and it’s simple and I really thought that it was going to work.
So I actually hired a law firm in Chicago where I lived before I moved back to Toronto and Mayer Brown, and they helped me apply for my patent application which I was . . . In fact, I hired them in December of 2011 and just the last couple of weeks ago in May I received and I was awarded that patent in the US which then I can apply in other parts of the world.

Rob: So what is the patent for?

Wendy: The patent, it’s a utility patent. And it covers, really there’s two parts in kind of general terms. The two parts are one if the idea of combining shopping and paying together on a consumer’s device together with the ability of the merchant to easily verify that that transaction was already successfully completed on the consumer’s device.

Rob: Wow. Which describes very many technologies that I’ve seen out there in the marketplace obviously. And I think it adheres to early on in our conversation that the philosophy behind what you’re doing was self-pay, right?

Wendy: Mm-hmm.

Rob: So I mean, it’s very interesting that you thought at that moment that you should patent this, that you should go through that process. Obviously you don’t regret that. Is that something that you got advice to do, or was that just an instinct inside that said, this is going to be big. And even if it’s not, it’s worth the risk to do this.

Wendy: Yeah, again, in a way because I’m actually not like a real serious techie myself and I felt like this was such an elegant . . . A lot of times actually the really great solutions are simple.

Rob: Yes.

Wendy: But because of that I realized it would actually be pretty easy to duplicate. So I wanted to protect it, and I did get the advice obviously of the patent lawyers that I hired if they thought this was a reasonable idea, and we obviously did all our research making sure no one else… I also wanted to make sure that actually I wasn’t going to invest all this time and effort but there also like 72 companies doing this. We did our homework too.

Rob: And you didn’t find any back then?

Wendy: No.

Rob: That’s amazing. And so how many do you think are out there now in this similar space? I’m not saying that they’re infringing on your patent now, but how many in those three years that you’ve been looking at the space and diving in the space and that patent has been kind of brewing. How many companies do you look at now and think… Is it dozens? Is it hundreds? A couple?

Wendy: I mean, it would be a guess, but I would say it has to be dozens because I think these ideas are becoming more mainstream, and there’s more. Apple certainly has its own notoriety obviously in the market and a lot of people write about it. And there’s been more writing recently just because when will Apple have NPC? Will Apple be able to extend the iTunes account mobile payment?
So this starts stirring up more ideas and more people thinking about. And obviously this is commerce and being able to shop and pay on your phone, the general idea of it. There’s lots of huge companies, again, PayPal being one, Google being another, Apple being a third. So these are the titans of industry, and it is kind of interesting that this little company in Toronto, we just looked at it differently and have extended beyond what they’ve been thinking about it.
But for sure when you go through that patent process in the last stage of it you get to see a number of other applications that are out there. And all the others were by very, very large global companies, and it was mine that was accepted. So yay.

Rob: So you see that little scrappy companies from Canada can win.

Wendy: You never know.

Rob: Again, I always talk about that because when you’re applying for a patent one of the key things that you do is protect it. So if you think your idea is something that you’ll be able to protect, you said. This is not going to be a difficult thing to emulate in a couple of years, and you’re right. Right now it’s not that difficult thing, but you protect it. And I always say, now that you’ve protected it, there’s two ways to use that patent.
One is to continue to protect your idea which means that you have to go and put a lot of money into finding any people who are out there infringing or it’s peace of mind. It’s intellectual property. It’s capital inside their companies. Should anybody decide to acquire you there’s value to that, and they can go and fight the big fight.
You know we’re Canadian. We’re not litigious by nature, so I’m going to assume that this is something that you, now you’re building your little wall around your company that says, “Listen, this is, this is our business, and if you step over the wall we’ll fight,” but as long as you’re out there doing your thing this is really just building IP. Am I putting words in your mouth?

Wendy: No, I would just say that, or we don’t want to like, we don’t have to fight. We can license the technology.

Rob: Right, right.

Wendy: You know it’s another way to do it, because in fact I am small, and we actually are fielding incoming interest from different companies of different sizes, you know small merchants, large merchants, and they’re not only in Canada, and the US, I mean I have… I’m talking with some merchants that are based in the UK, that are based in Dubai, certainly the US, and certainly Canada, and there’s multiple uses for the technology too. So, that’s also something that we’re quite open to, or you know for the larger retailers that we’re talking with we’re talking about potentially “white labeling” a solution for them. That’s another option in that we’re quite open to as well.

Rob: Do you, just out of curiosity, I know we’ve totally gone down this different path here, but I’m so fascinated by this patent thing, because all of sudden it’s like, “Yes I’ve got it,” and do you kind of, you maybe know a dozen companies and you say, “Hey lawyer, just send them a note that we’ve been awarded this patent,” and do you, is there like a notification period, you know, like when you’re getting married, you know what I mean?

Wendy: Well, I will say that I’m at least conscious of it. You know for instance, it’s something we’ll add it to our website, we will when we’re having especially, because a lot of the companies that we’re partnering with, that we’re dealing with, some of them are very large, and much you know better funded than ourselves. So, we’ll certainly make sure that it’s you know that it’s mentioned…

Rob: Yes.

Wendy: And certainly if nothing else just our, you know Canadians try not to be boastful, but it is something that we’re proud of.

Rob: Do it, its okay. We can be anti-Canadian for a little… Not against Canadians, but we can be you know against the way that Canadian’s are perceived, its fine.

Wendy: Yes.

Rob: Da** straight. Well, part of this whole thing was that you know what drew you guys to me was this whole LUX Beauty Company in Edmonton that did this, I guess it was for an anniversary. Can you walk through this whole use case around what they did, and how it turned out?

Wendy: Yeah, absolutely. So, just in the beginning I’ve known Jennifer Grimm, who’s the owner of LUX, for actually since I guess early 2012. So, she was like the longest most loyal patient first client anyone could ever have.

Rob: How did you meet? Like, so did she find you? Did you find her? Because, you’re in Chicago at that point, she’s in Edmonton, Alberta, like how does that happen?

Wendy: Yeah, so we met in New York, of course right?

Rob: Of course.

Wendy: Where else would you meet? But that was the first year that I went to the NRF, the National Retail Federation. I just went as an attendee, and that was known as my fact finding stage building the concept out and so on, and literally it was serendipity. I just happened to sit at a table and that particular speaker wasn’t as an engaging as we were hoping, and so Jen and I just started talking, and you know the rest was history. And then literally a couple of years later we launched SelfPay at LUX Beauty in December of 2013.
But I can tell you what’s interesting is already since that time we, we’ve just uploaded our fourth version so that’s not bad, yeah that’s almost a version a month so there’s lots of learning, but the big event that happened recently was in April, and that was her fourteenth anniversary event.
So, she’s been in business 14 years. Every year she has this big event so it draws a lot of people, therefore it’s going to draw a lot of lines, and she knows this in advance. So, she really wanted to promote SelfPay for her customers to get them out the line quickly, but obviously also you know to her own benefit too, because it helped, actually you know retailers talk a lot about inventory turns, and how fast is an individual item turning, and they kind of want to track that, but in her case she started thinking about shopper returns, because she has a smaller store, just about 700 square feet.
So, her ability to turn her customers in and out of her store more quickly is going to result in higher total sales even if everybody didn’t use you know SelfPay, it just has freed up the rest of the store for those people that did. And on that day, it was in April, Saturday in April, I guess it was the 12th, 8% of her total in-store transactions went through the SelfPay platform.

Rob: That’s amazing, and it was launched that day?

Wendy: Well, it was launched in December.

Rob: Yeah, but for her patrons did they… I mean, because what I read was that people would walk in, and they said like you can wait in line or you can download this app and pay.

Wendy: That’s right, and that’s what she was promoting that day. So, we had 78% of the people who downloaded SelfPay for that event they downloaded it the same day.

Rob: And then 8% used it?

Wendy: And then 8% of the total…

Rob: Volume.

Wendy: Yes, exactly the total transactions used it. It’s like, and those are huge numbers it’s like a… I’m not you know I can’t compare completely to a company like Starbucks, which of course their mobile payment app is a very you know it’s written about a lot, and they talk about well they’ve reached 10% of their transactions gone through their mobile payment platform. And that’s there on every platform. They’re you know obviously it’s… there corporate talking about…

Rob: And they’ve been doing it for two years?

Wendy: Well that’s right, and but of course they’re talking about a lot more volume, and a lot more stores clearly. So, these are you know what I’m talking about it’s a small, far smaller sample size, but it certainly gives you the idea that when customers are actually sitting there looking at a line, and someone tells them, “Well, you don’t have to stand in the line. Download SelfPay, like two minutes and you are out of here,” and people did.
So, because there’s also a lot of writing, as I’m sure you read the same as I, people are saying you know they’re wringing their hands, “Why aren’t mobile payments taking off,” and everyone thought it would happen faster, and you know what’s really going to be the incentive? Well, we just need coupons and loyalty. If we would just add coupons and loyalty to mobile payments that’s the going to be the answer. And I think that those things are great, and those things certainly will help and improve the value proposition, but we just feel like getting the customer out of the line is much larger proportionately to those things, and in those just evidence by the numbers.
So, you know you see a real tangible problem, and then someone says here’s a quick solution and it’s free, you can do it right now, will people do it? And then you know even better than all of that was that the shoppers who did use SelfPay spent 17% more per transaction than actually the nearest highest kind of transaction, which is like the plastic credit card after you’ve waited in line to pay.

Rob: What? So, 17%, what explains that?

Wendy: Well, if you think about it like this, so let’s say, you and I we’re going to go shopping, and you probably have in your mind that you want to buy that one thing. You may even have researched it beforehand. A lot of the studies are saying that that’s actually the path.
So, you have sort of an idea and a destination in mind, and so in my case maybe it’s a certain you know the new shade of nail polish. I’m going to go to LUX, and I get there and I’m going to go to find that item and if I’m having to stand in line I’ll get the item and I’ll go directly to the line, because we’re kind of conditioned to do that. That’s what we do, we get our item and we go to the line. And then it’s just human behavior, natural human behavior.
So, you stand in line, and even if you think just of, “Oh, wait a second I think I need the eye cream as well,” or you look over to the corner of your eye while you’re waiting to pay, and you see, “Oh, there’s another color. That looks nice too.”
Well, what do you do? You, you know like anybody else, you’re going to like look at how much longer you have to wait in line, how many people are behind you in line, how much time you’ve already committed to that line, and you know even if you’ve committed like one minute to the line it’s like slight cost, but no one wants to re-wait in that line so you’re like, “You know what? Forget it, I’ll just get this one thing I came to get, and never mind the others.” Whereas in the case of SelfPay there is no line. So…

Rob: Bring it all in.

Wendy: So, you can just keep shopping. So, you… and you know what’s funny? Like, you may actually spend more time in the store, because you are deciding how much time you want to stay in the store, not the merchant. They’re not forcing you to stay because of their line.

Rob: Right.

Wendy: Right, I think, again it’s the psychology is different, so.

Rob: It’s productive in store time as opposed to like lost in store time.

Wendy: Yes exactly, and then you feel good about it, because you decided. People don’t like having things decided for them that’s just our human condition. So, you saw the first item, and then you think of the other item you want. You go get the cream then you’re like, “Oh, look at there’s a really… look at there’s a three set. That’s fantastic,” and then when you’re done you’re done. Obviously you need to self-regulate, but there you have it.

Rob: Yes, exactly, you got to control the brain.

Wendy: That’s right, but when you’re done you’re done, and you’ve decided you’ve got those things that you wanted, and off you go.

Rob: You know the thing I love about Amazon’s strategy, right? Whether you’re a retailer or not you have to look at this company and say listen, you know there’s differentiation that you do that brings retailers, or customers, into your store, right? So, you’ve taken all that stuff aside, but what I love about Amazon is they don’t focus on the payments. We talked about it in the early days. They focus on getting things in your cart.

Wendy: Right.

Rob: All their technology, everything that they do from one click down to unique devices, all they’re trying to do is get things in the carts because that’s the hurdle. And it sounds like that’s what Jennifer was doing here at LUX we’ll get it in the cart and payment will happen. Is that fair to say?

Wendy: That is fair and I was just . . .

Rob: Go ahead.

Wendy: If you would ask Jen she would say especially on that really super day or anniversary day going back to this idea of the shopper turns . . .

Rob: Yeah.

Wendy: …because 8% of her transactions went through SelfPay so those will flow through the store much more quickly. This is not me saying this. Jen would say that she credits her total year on year sales on comparing the busy day this year to last year they were higher by between 20 and 25%.

Rob: Wow.

Wendy: Sure. Music to any retailers ears…

Rob: Yeah.

Wendy: Those are really huge numbers, and she feels it’s because she just made more space in the store. Everybody was happier. Even the staff was happier because there was less stress. There was less waiting. People flowed through much more quickly. It was just all around a better experience.

Rob: What makes Jen so great? Do you know what I mean? When you’re sitting with her in New York at NRF and you’re having these conversations, flash forward two years and she uses this technology, why her? What kind of person is she, I don’t know, take these risks…

Wendy: Yes.

Rob: …even though it’s a formed relationship with you, but why her? Why is she so special? Why did she get this?

Rob: You know what? She is special, and she is very open-minded. She is very creative, and she’s actually, her goal is to… Actually I think her tag line is going to be happier when you leave her store.

Rob: I love it.

Wendy: What a great way to be, right? Again, she’s thinking about that’s the key point there. She’s thinking about her shoppers, and she wants to make them happy because if she makes them happy they’ll come back. They’ll have a good experience, and you know in some retail there’s a high turn rate. A lot of retailers don’t make it.

Rob: Right.

Wendy: And she was celebrating her 14th year.

Rob: Amazing. That’s amazing. As an individual retailer>

Wendy: Yes.

Rob: And it’s in Alberta? Yeah, called LUX Beauty?

Wendy: Yes.

Rob: You know what? If you know Alberta at all and you do or you don’t it’s like an extension of the United States because it’s basically oil, right?

Wendy: Yes.

Rob: It’s an industrial province. So 14 years as a beauty store inside of Edmonton. The reason I ask about Jen is because, you know, it takes a certain specific type of person to create a unique experience inside of their retail environment to be able to get people to come back and enjoy the experience enough so that they can be in business for 14 years. But then at the same time not hold on to all of the things that you’ve done over those 14 years but to be able to think outside, rethink how you actually interact with your customers.

Wendy: Yeah.

Rob: That’s amazing really.

Wendy: It is and it’s really kudos to her. And just recently she launched a Shopify online web store which is . . . So now she think of LUX this little, again, she’s a small retailer, but you can shop and pay at her [inaudible 00:33:46] using her fantastic vend. You know, cloud-based POS.

Rob: Yes.

Wendy: You can shop online at Shopify, and you can shop in the aisle with SelfPay.

Rob: That’s what I love about small retailers, and Shopify is, by the way, in Ottawa, Canada. A startup just so there’s . . .

Wendy: It’s just a little bigger than me.

Rob: No, I’m just saying that there’s a lot of innovation happening in Canada and there’s a lot of open-mindedness in Canada. So…

Wendy: Yes. Absolutely.

Rob: Well now, so for your business here what’s your take on this? How do you generate income from what you’re doing for companies like Jennifer, for people like Jen and LUX?

Wendy: Right. So what now we have is we have a monthly subscription fee for the small and medium sized merchants. So it’s just a flat fee. We don’t charge anything on the individual transactions. It’s just we leave that to the payment people that their game. And it’s very easy to get on board.
So we have already integrated to four different POS systems. So one of them is LightSpeed out of Montreal, Shopify out of Ottawa. Vend HQ out of Auckland, New Zealand and BeanStream out of Victoria, BC which is part of DigitalRiver, a US company.

Rob: Three out of four are Canadian companies. I like that.

Wendy: Yes, yes, yes, yes. That was very clever. And they, you know, together they represent I think probably somewhere around maybe 130 or more thousand individual merchants in 100 countries. So it’s very quickly becoming, even for our small company we’re also, we’re mirroring them because we’re starting to get, as I said, this interest from retailers in all kinds of different parts of the world.

Rob: Are they helping you? Are they helping you market, do they help you create awareness? Marketing on a shoestring is difficult but…

Wendy: Yes.

Rob: …is that part of the strategy, to hook up with these guys…

Wendy: Yes.

Rob: …support them, and then hopefully they’ll help market you?

Wendy: That’s right, well one of the things that several of these POS companies have is they have their own, obviously they have their own website, they’re promoting their own product, it obviously makes sense. But they also have all of them are starting to have app stores. Which, again, we can accredit back to Apple with the original app store, but now all these POS companies have app stores.
And if you think about it, so if you were a merchant and you sign on to one of these cloud-based POS companies and so now the model has changed. You know, it used to be flat-fee, server-based, all your, you know, one up-front fee, and then you have that sort of solution for four or five years or something. But now-a-days, most retailers want to move to cloud-based POS, get their data in the cloud, it’s much more flexible, they can access it from anywhere, plus it can connect to all of these cool third-party apps like self-pay, and others. So, that’s obviously a great, a great opportunity.
But, it also makes those merchants, it’s easier to switch. So you can switch between more easily. So one of the things that helps some of the cloud-based POS companies is that, if you have, if you’re going to be able to offer a much wider array of services on top of your core, great platform, then that merchant’s going be happier and they’re going to be less likely to want to switch. Because they’re going to get all of their needs met.
And so, for example, or now, like, the first POS company that we integrated with was Vend, and they’re the New Zealand based one. So they have, they feature us on their website in the resources and add-ons and so actually a couple of those international retailers that have contacted us directly, they found us on the Vend website.

Rob: Wow, I love that. But that’s what you need to do, those partnerships are so critical, right? And, you know guys like Shopify and Vend, they’re out there hustling, on the behalf, on behalf of you guys. If they build out their ecosystem, you guys will benefit from that ecosystem.

Wendy: Yes, yes, that’s right, that’s right. And then that’s for the small and medium sized merchant which is where we’ve started, and where obviously we have something in the market. But we’re also in conversation with some of the largest specialty retailers in North America.

Rob: How do you find them or how do they find you? I’m very interested in this, so you found Jen by happenstance, right?

Wendy: Yes.

Rob: You didn’t know that that relationship would lead to this, right?

Wendy: No.

Rob: You just sat next to her. And it did, because you can create relationships that way, and they grow, right? But when we’re talking about faceless, you know, nameless, big corp, large companies, you know, the panacea for a lot of people that, this is their goal to sell into those. How is it that you have breached the, you know, the walls or the moat of some of these big companies?

Wendy: Well it’s really been in two different ways. So that the first way, is just by trying to put my company out there, so I have, you know, I have a twitter profile, it’s @digitalretail. Everything on there that I talk about is, has everything to do with retail, digital, commerce, innovation and it’s not just limited to SelfPay or to my system. You know, I think it’s important to just kind of advance, advance the knowledge out there.
And I also, I’m invited to speak at different conferences. So, I spoke last year at the Card Not Present Conference in Orlando, and in fact, that’s where we won the Best Mobile Solution last year, which was great. I was invited by Retail Council of Canada to speak at their Retail West Conference. That’s where I met some large merchants during that speaking engagement. I’ve spoken at South by Southwest and you know, kind of, I, there you go, I mean that’s a big part of it.
And the other part is just through, you know, really telling, like networking. Going to the conferences, having booths at conferences we were in IRF, we were at 2020, another big sort of FinTag. We were selected as one of 15 out of 300 companies who applied to this Swift Innotribe Financial Technology Start-up Conference, which has pitches in like, Singapore, London and New York. And so I’ll be in New York next week as one of those Selectica semifinalist so just getting out there really and then my own network.

Rob: So that’s, that’s a lesson right there, is that, you know, this is not easy. And even though you can attain a little bit of success and you have the patent behind you, the effort is just beginning for you.

Wendy: Yes, Yes.

Rob: Yes.

Wendy: But it’s exciting.

Rob: So where does this, where does this industry go? You know, I don’t know that there’s a clear path here. Maybe there is, but you’re right in the middle of this, and I’d love to know what kinds of trends you’re seeing emerge from on the retail side, on the consumer side. And then how do you see this, how do you see mobile’s payments, not spreading but being accepted? What is it going to take? So start with what trends you’re seeing out there.

Wendy: Well, some of the big trends that we see are certainly around the location-aware applications. And obviously, you know, the iBeacon and Beacon efforts are significant to that. And that’s something that we integrated with Estimote Beacons at Loxda back in January. And I think for lots of different retail applications, that’s going to be transforming.
So with the idea that you can have much more contextual awareness and those kinds of locations, and to be able to deliver highly personalized content. And not only just to the person, but to the time of day, to their past buying behavior so that, you know, no longer should you get the Chinese food coupon, like at seven in the morning when you’re really not thinking about it. It’s got to be much more contextual.

Rob: You don’t think about Chinese at seven in the morning?

Wendy: You know, most…

Rob: Sometimes I do.

Wendy: Well, yeah, yeah.

Rob: Wow, I wish it was noon.

Wendy: Yes

Rob: I’ve had those conversations. Is it too early to have the leftover egg rolls at nine in the morning? Yeah, I think it is. Sorry.

Wendy: If that’s your context, then you should be getting that coupon at the time.

Rob: I should be. There you go.

Wendy: But that’s the point. It’s got to be highly personal without, you know, getting into the creepiness factor. I mean I think that that’s going to be the double-edged sword. So that if an app developer or a merchant or a service provider is overdoing the personalization and a little too spammy, then personal will just turn you off.
So, I like that it will be self-regulating, that, for that specific app or that specific merchant or whatever, I’ll just disable location services, and I actually do that myself. So it’s a good, it’s the right check and balance.

Rob: It is. It’s in your control.

Wendy: Yes, and you want to do where it’s actually going to be, you’re helping the customer find something, discover something, learn about something. And it goes well beyond, you know, traditional retail. I have a friend who is in the, you know, art gallery app space. You know, being able to closer to a painting or a sculpture and learning more information about because of a proximity application. I think that’s fantastic, and it’s going to be enriching to us. So that’s a huge, huge trend. That, and the location and the personalization. Those are really huge.
I think on the mobile payment side though of things, you know, it’s easy to talk about what we need. Ubiquity. We need, you know, we have a bit of the chicken and egg so you need to have it accepted before you get vast consumer adoption. And we just think about two things.
One is to find, and hopefully the industry starts to cooperate even more together so that there’s more cross-platform kinds of offerings. And I think, actually I give credit to another Canadian example. TD Bank recently had an announcement of their mobile wallet, and they are now, it’s accepted on all the mobile wireless carriers. So, just as an example, I think that’s great, because shoppers, consumers, they don’t like being tied in to one device, one carrier, one mobile payment method. It feels restrictive.
So, I think that as the industry moves more toward this open ubiquity, that’s going to be something that’s going to encourage the adoption of mobile payments. And then obviously we would say, too, it’s just the more value that you can give to the consumer. It’s all, you know, it’s all back to the consumer. If you can give them more value, like real tangible value, not just like bells and whistles, then you’re going to start to see more adoption.
And certainly, one of the reasons that, in our specific case, our technology is independent whether it’s Android or iOS. And we thought that that was something that was also very important. You want to be able to switch back and forth. You know, I mean, I have an iPhone now but maybe my next phone will be a Samsung Galaxy. I want to be able to move back and forth and I don’t think my choice of mobile payment should dictate which of those devices I’m going to use because I got to get into a contract.

Rob: It’s crazy to think about it. It would be the equivalent to my wallet doesn’t work when I’m wearing these jeans.

Wendy: Right

Rob: It doesn’t work. I do so many presentations about this concept of payments and I’ve heard the most ludicrous. I just came back from Amsterdam, where it’s all about mobile payments. Perhaps consumers don’t want a mobile wallet. There’s not a consumer I know that has put up their hand and said, “Oh, can I please have a mobile wallet, and can I please have five or six different mobile wallets. Please that’s exactly what I want.”

Wendy: Right

Rob: Because if you look at the people providing this, that what it would seem is their perception. I heard presentations that said you know what consumers are going to have three or four different mobile wallets, and I said, “No, no, they don’t want any. They just want to pay.”
So you are right about that whole concept of being locked in. They are not interested. They just want to pay. Until you have made it so da** easy for them to do it and add value like… I can check out without checking into a line, way back to the very beginning of this conversation, that first challenge, where’s the pain? Standing in line. What’s the pain you’ve solved for 8% of the people at LUX? You’ve solved that pain for them.
Now I wonder how many people come back and start using it without that pain. Just because they now accept it and I think that’s an interesting piece.
Last thing is maybe a bigger trend that I see, I want to get your opinion on, last thing is this whole idea of retail no longer being the Luddites of the technology industry. Retailers like Jen maybe becoming technologist. Starbucks is the Litmus test for me in technology and the Gap has just put $300 million into augmenting their retail experience in mobile and social and web and digital. All of a sudden the retailers are becoming technologist. What do you think that has? What impact do you think that has on the way we shop?

Wendy: That is a huge point. One of my favorite examples is to talk about Nordstrom. When I went to business school so many years ago, they were for a long time held up to be the retailer to have the high touch. Nordstrom was all about service, customer service. How that was deployed historically was through a lot of policies and procedures but also the people, they way they laid out the store. Lots of different ways that deliver that. There was a heavy element that was personal, physical, and individuals helping the customers.
Nordstrom, very early on in our research came out as one of the most technically savvy retailers out there. I love that they are one of the retailers that are really embracing technology. They have a great mobile app. At least in Nordstrom I can check out with the associate in the aisle, which is part way toward what I would like to be able to do. They have a great lab internally. They are doing all kinds of things. This is the company that built their foundation on service. I love that juxtaposition of that. I think it is really important.
I think retainers are scurrying to start to bring on-board more and more of technologists and people that have a digital DNA in them if you will and to blend it into the total business. Because if you go back about ten years when e-commence was in its early days and just starting out, what did they do like any company? Well, that’s going to be a separate division, that’s over there. We’ll hire some technology people just to do e-commence.
But then what even the largest companies like Walmart found is that you actually don’t to have those in their individual silos in your organization. You want to cross-pollinate the technology people and the marketing people back and forth across all the different channels and even kind of getting rid of the false functional barriers between in-store, online, and different things like that where you actually want the talent and ideas to move more freely across.

Rob: I don’t know that I could have said it any better. We see this and I was going to end it here but then I look at this Canadian retailer which we know very well, which is Indigo or Chapters, which is our Barnes and Nobles.

Wendy: Yes.

Rob: A big book store that has kind of lost its way. It sells plush toys and candles, and cookies, and chocolates, and pens, and paper, and books, and magazines, and Kindles, and like you name it, it sells it. Right? And it’s become like the grocery store for stuff that you couldn’t get at the grocery store, but you show up at an Indigo. And I don’t want to insult anybody here, but I think I probably just did in that whole tirade.
But the thing that is alarming to me is that I still believe that those guys are very siloed because when you go into their store, and this is the experience that they had, when you go into their store and you use their app, and they promote their app everywhere, and they say don’t forget to scan your book and you can buy it online. And when you scan your book when it’s on the shelf, it gives you a 25% discount when you buy it online. And then you take that book to the cashier and you say, “Well, I just want to take this home. It’s 25% cheaper when I scan it on my app. Can you price match?” And they say no.

Wendy: I know.

Rob: They say no.

Wendy: Yes.

Rob: So that tells me that there’s something fundamentally wrong with their entire business model when that person says no.

Wendy: Right, it’s disappointing at best. Right?

Rob: How does that happen today though?

Wendy: I’m understating it. Well, I think again, Indigo and lots of retailers have to maybe take a step back and think about the experience going back to the customer experience, the shopper experience, and just literally it’s like a day in the life. Just walk through the experience they’re having and think to themselves how could I make this better, what’s going to really help here.
And just to add, there’s one more retailer. Because of what I do, obviously I’m very attuned to what other retailers are doing and I find myself in the Bay recently and they have these great new signs. Found huge big, giant signs that if you can’t find the item that you’re looking for in your size or your color, all you have to do and they may even have a big… I think they have an image of a bar code on the sign, just ask an associate and they will be able to scan that bar code and find the item for you.
Have you been in the Bay recently? Look around. I am like… Well, if only I could find an associate. I have a phone in my hand.

Rob: Please.

Wendy: Why can’t I scan it?

Rob: So funny because they just laid everybody off. Right? That’s the problem. Yeah, it’s common sense and that point, and maybe we’ll leave it there is that if you are a retailer and you’re listening to this or if you’re in this business and you’re listening to this, maybe you’re Indigo or maybe you’re at the Bay, or you know somebody there, literally go and try to buy a product inside of your store.
I don’t care if you’re the executive, the CEO, just go and have that customer experience. Like a gen store at LUX Beauty in Edmonton, go and have that experience and then look at how your processes are doing, and don’t lead with your process, lead with the customer experience.

Wendy: Here, here.

Rob: Whoa. Okay Wendy, where do we send people to find out more information about you, your products, everything?

Wendy: Okay, so they can find me on Twitter at @digitalretail and they can find my website at DigitalRetailApps.com.

Rob: DigitalRetailApps.com and @digitalretail. We’ve been speaking with Wendy MacKinnon Keith who is the found of this great thing called SelfPay. Definitely go and check out, follow her on Twitter, check out her website, and I would love to have you back on Wendy if you’re willing to.

Wendy: Oh, I’d love to.

Rob: Yeah.

Wendy: Sounds great.

Rob: Please, please, please. This has been so fascinating. I love this industry. I love what you’re doing. Congratulations on the patent.

Wendy: Thank you.

Rob: Congratulations on your success so far. And Jan if you are listening, congratulations on opening up your mind and being receptive to this new technology. I can’t wait to see what you do for your 15th anniversary.

Wendy: Yes.

Rob: Boy, oh boy. Wendy, thank you for doing this.

Wendy: Thank you so much. It’s been great.

Rob: You guys who are listening, where ever you are, whatever you are doing, thank you for listening. Thank you for participating with Untether.tv. It means a ton. I can’t explain it enough in here, but it really does. Thank you for tuning in, staying this long into these episodes, it really means a lot, and we will see you next on Untether.tv. Thanks, Wendy.

Wendy: Thank you.

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About Wendy MacKinnon KeithWendy is focused on transforming the in-store experience through in-aisle consumer-led mobile payments. Wendy has deep international management consulting experience working with Fortune 100 companies and executives in industries including retail and consumer technology, to global companies such as IBM, Ameritech, Nokia and Safeway. Digital Retail Apps flagship solution SelfPay was launched in December 2013 to address many of the problems retailers face with consumer engagement and a fragmented in-store shopping and payment experience. Wendy has an MBA from Ivey, is a frequent speaker at events such as SXSW, Finovate, Retail Council of Canada and Card Not Present. Wendy tweets from @digitalretail

About the author

Rob Woodbridge

I'm Rob, the founder of UNTETHER.tv and I've spent 14 years immersed in the mobile and pervasive computing world. During this great time I've helped some of the most innovative companies grow their business through mobile. If you are in need of a mobile business advisor or coach, connect with me here to get things rolling.